In a notice to the BSE, a statement from Wipro said, “After evaluating the changing market scenario and customer needs, it has decided to strengthen its position as a system integrator and increase its focus on IT solutions and services. As a consequence, the company will discontinue manufacturing of Wipro branded desktops, laptops and servers.”
The IT products or hardware segment is a sizeable business for Wipro recording a revenue of R937 crore for the second quarter of second fiscal. However, the operating income or Ebit was a mere R15.2 crore.
According to experts, Wipro had less than 4% market share in the PC market. HCL has already done that and Indian companies could not grab a requisite market share to gain a scale that would make the business viable. Experts feel that Indian players were selling older models and with wafer thin margins in hardware business, these companies bled.
Wipro has a long history of hardware manufacturing having first entered into a JV with global PC major Acer. It currently has two plants in Pondicherry and Uttarakhand manufacturing a range of products under its own brand name.
Wipro Infotech head Soumitro Ghosh said, “Manufacturing our own PCs was not giving us a competitive differentiation in our system integration solution offering.”